Take 3 on Package 2

The Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill was signed into law recently on the 26th of March 2021 which is now Republic Act No. 11534. Finance Secretary Carlos Dominguez III said in his speech "With CREATE, we are leaving money in the private sector's hands to revitalize their businesses...We trust that enterprises will re-invest their tax savings from CREATE back into the economy to spur domestic activity and create more jobs for our people."

Due to the pandemic, various aspects have been affected including businesses as well as the economic conditions of the country. It brought negative effects which forced the government to rethink its fiscal strategies. The said law measures the lowering of corporate income tax in the country, currently at 30%, is lowered to 25% for large corporations and 20% for small businesses. This will be done for them to save on annual tax payments and have higher revenue to provide a larger budget for the salaries of their employees. They treat this as a solution for more job opportunities for the people and to import modern technologies. Besides the lowering of the income tax, the said corporations will also attain “ayuda” or fiscal and non-fiscal support from the government which can extend for 40 years and this aims to garner foreign direct investments.

However, it seems that there are some errors in the provided law by the government. This law should not be treated as a financial relief for the micro, small or medium enterprises because it is evident that only the large corporations will benefit from these amendments done by the government. The businessmen and other entrepreneurs of these large corporations will use the subsidy given by the government as support to purchase new and modern types of machinery as well as materials that will help to increase their production. By doing so, will lessen the need for the help of some workers or manpower in production. There will be lesser job opportunities for normal workers and minimum wage earners. This law will just give an “instant relief” to the business owners and entrepreneurs in the country and should not be tagged as a recovery measure especially for small businesses who are still suffering from the effects of the COVID-19 pandemic. It will tax only the poor and they will carry the taxes meant for rich conglomerate companies which will be their way to reach its peak. Therefore, the effects of the CREATE law in the country are evidently favored only on the large corporations and conglomerates. This pandemic forced lower sales volumes, worker layoffs, and business closures, and with its increasing number of cases in the country, the response of the government should be more competent and with a sense of urgency. The social pyramid is still the same - those in the higher position will remain and those at the bottom will continuously be oppressed.